Overdrafts, credit cards, even loans. If you've debt, ensure the rate is as cheap as possible - and nothing's cheaper than 0%

 Martin here... The regulator the Financial Conduct Authority has just rightly proposed a crackdown on short-term, high-cost credit. It's looking to cap rent-to-own rates (where you get a fridge/TV on credit and it can cost 5x the true sum), to change the way overdraft-breach charges work, and to toughen doorstep lending rules (though I want 'em to go further). I admit we don't have guides for those, as we belie ve they're bargepole products (ie, don't touch them with one). Yet sadly some who struggle and can't get other credit feel trapped into using them.

If that's you, first do a budget to minimise expenses, then check credit union options and payday loan alternatives. Plus if you've paid fees for busting your overdraft, see if you can reclaim bank charges for free.

Yet for ANYONE with debt, ensure it's at the cheapest rate possible. Nothing beats 0% (done right), as you just repay what you borrowed at no cost, so all repayments clear the debt, not just service interest. So the team has put together top tips to cutting ALL debt costs...

1. Cut OVERDRAFT costs to 0%. While the FCA focused on ghastly up to £8/day fees, even a £1/day arranged overdraft could cost a mega £365/yr if consistently £100 in debt. Do your utmost to stay out of your overdraft as it's NOT your money - it's debt that needs repaying. But if overdrawn, there are two ways to cut interest to 0%... (You need to pass a credit check for both.)
   
   a) Try to switch to a 0% overdraft. First Direct* offers an ongoing £250 0% overdraft. Plus, if you switch to it you can choose from perks such as £170 Bose wireless headphones or a £150 Expedia voucher (see full info). It's topped every customer service poll we've ever done and offers a 5% regular saver. There's a £1k+/mth min pay-in for the account, otherwise it c osts £10/mth. Nationwide FlexDirect's 0% overdraft can be bigger, but only lasts 1yr (it costs 50p/day after) so aim to clear before. More help in 0% Overdrafts.
   
   b) Use a 0% money transfer credit card. This is where a specialist card pays cash into your bank, clearing your overdraft, so you owe it instead - useful for large overdrafts. The top deal is from MBNA (eligibility calculator / apply*) which gives up to 32mths 0% for a 2.99% fee (23.9% rep APR after). For full help and best buys see our Money Transfers guide.
   
   c) Can't get a better deal or struggling? Ask for help. The FCA says firms must ensure customers are treated fairly. So if you've a big overdraft and can't switch, call your bank. Full help in Cut Overdraft Costs. 
   
   
2. Cut CREDIT OR STORE CARD debt with up to 36mths 0%. A mega 55% with a card balance pay interest - at typical 20% rates that's £400/yr on a constant £2k debt. The remedy is often a balance transfer - where you get a new card to repay debt on old cards, so you owe it instead, but at 0%.
   
   But don't just apply willy-nilly. Each application marks your credit file, so if you're rejected and you apply again, it makes it trickier. Instead use our free Balance Transfer Eligibility Calc which shows which of the top cards you're most likely to get.
   
   

3. Cut PERSONAL LOANS to 2.7%. If you have a loan with a high interest rate, the big question is "Can you get a new loan to clear your current one and save?" Here's what to check...
   
   STEP 1: Ask your current lender for a settlement figure. This is how much it costs to fully repay your loan now, incl early repayment costs  of up to 2mths' interest. In other words, this is the amount you'd need a new loan for to pay off your old one.
   
   STEP 2: Find the cheapest new loan to cover the settlement figure. For borrowing of under £3k, doing a 0% money transfer is likely cheapest. For more, the cheap loans below win...
   
   - £3,000-£4,999, Zopa* is 5% to 6.9% rep APR.
   - £5,000-£7,499, Admiral* is 3.3% rep APR.
   - £7,500-£15,000, Sainsbury's Bank* (1-3yrs, needs a Nectar card) is 2.7% rep APR. Full info & options: Cheap Loans (APR Examples).
   
   Use our free Loans Eligibility Calc to see your likely cheapest deal, yet remember only 51% of accepted customers need get the advertised rate, the others can be charged a higher rate.
   
   STEP 3: Work out how much it'll cost you to stay where you are. Check your monthly repayments and how many are left (ask the lender if unsure) to work out how much it costs to stick.
   
   STEP 4: Check which of steps 2 & 3 is cheaper. Use our Loan Switch Calc.
   
   

4. Urgently check if you can slash MORTGAGE costs by £1,000s. If you've a mortgage deal ending soon - or you pay your provider's potentially pricey standard variable rate (SVR), which most intro deals revert to - check NOW if you can save. As SVRs average 4.75%, and 2yr fixes start at 1.39%, switching can save £6,300 over the 2yrs before fees on a typical £150,000 mortgage.
   
   There's urgency as it's the biggest monthly expense for many, but also as rates are creeping up. Huge savings are possible, as Alysia emailed: "Followed your tips and switched, saving £338/mth. That's £20,280 saved over 5yrs. Thanks, MSE." Full help in our Remortgage Guide 2018, plus use our Mortgage Best Buys tool to benchmark the top deals.
   
   

5. What about my STUDENT LOAN 'debt'? In many cases, while it's counter-intuitive, you're better off just to leave it. However, it depends on which type of loan you have, which depends on when you started. We've full guides to help either way...
   
   - Started in or after 2012 (and you're from Eng or Wales)? See Martin's Student loan interest is 6.1% - panic or pay off? guide.
   
   - Started before 2012 (or after and from Scot or NI)? See our
   Should I repay my student loan? guide.
   
   

6. Are you in debt crisis? The options above are designed to help people who can handle their debt and get out of it. But if things are tough, that may not be the right solution. Do any of these apply?
   
   - You can't even meet min monthly payments.
   - You have non-mortgage debts bigger than a year's salary.
   - You have sleepless nights or depression/anxiety over debt.
   
   If so, forget the solutions above and get free, one-on-one debt-counselling help from Citizens Advice, StepChange or National Debtline. And if you need emotional support too, try CAP.
   
   All are there to help, not judge. Read inspiring stories in our Debt-Free Wannabe forum and also see our Mental Health & Debt guide. Full info: Debt Crisis Help.

Martin Lewis Money Show LIVE SPECIAL, ITV, 8pm Tue 12 June 
It's an 'ask me anything' live hour - incl the brand-new 'Holiday Hacker'

Over to Martin... "I've a live special next week. And as always that means you can watch the show, get in touch and ask me questions on anything. I'll also be running through how to slash the cost of holidays, including travel money, insurance, car hire and my 40 holiday hacks. Do watch or at least set the Betamax."